BMW’s first-quarter operating profit dropped 78 percent to 589 million euros, regardless of higher deliveries of luxury vehicles, as the automaker felt the effects of higher investment spending and a 1.4 billion euro ($1.6 bln) legal provision.
The European Commission earlier month informed German automakers they face hefty fines for alleged collusion in the area of emissions filtering technology. BMW rejects participating in anti-trust activities and is disputing the accusations.
Adding to the downbeat tone, the company repeated that it anticipates group profit before tax to be well below the earlier year’s level. It also sees weaker auto sales in the first half of this year as factories are retooled to produce a new 1-series and 3-series.
BMW’s first-quarter revenues prior interest and taxes were less than the 666 million euros forecast in an analyst poll. A contribution of 648 million euros from financial services only partially offset a 310 million euros loss prior interest and taxes at the automotive division.
BMW further booked a 328 million euro valuation gain from BMW and Daimler’s mobility services business, the automaker stated.
Analysts stated BMW’s results were underwhelming, noting that sales of electric and hybrid vehicles were not stellar.